We Have Met The Enemy--And It Is Us

Michael Finnegan, of the Los Angeles Times, offers this analysis. Here's the most interesting quote: "The public's contradictory impulses were laid bare by a recent Field Poll. It found that voters oppose cutbacks in 10 of 12 major categories of state spending, including the biggest, education and healthcare. Yet most voters were unwilling to have their own taxes increased, and they overwhelmingly favored keeping the two-thirds requirement for tax hikes."

What Happens If The May Initiatives Fail?

The Assembly Republican leader speculates that the legislative majority could adopt another measure including taxes and fees by majority vote, as it did last December. Here is the story, from the Sacramento Bee's Capitol Alert.

The Contra Costa Times On Ballot-Box Budgeting

Looking for a culprit to blame for California's budget crisis? The fault, says Daniel Borenstein of the Contra Costa Times, is partly with us--i.e., the voters. Here is the column.

LAO Issues Grim Report On State Finances

Here is the latest from the Legislative Analyst, who projects continued budget shortfalls even with last month's budget deal. The key message: "Our updated revenue forecast projects that revenues will fall short of the assumptions in the budget package by $8 billion. Moreover, a number of the adopted solutions—revenue increases and spending reductions—are of a short–term duration. Thus, without corrective actions, the state’s huge operating shortfalls will reappear in future years—growing from $12.6 billion in 2010–11 to $26 billion in 2013–14." Here is a summary article from the Sacramento Bee.

What If Voters Reject The Budget Propositions?

Rough&Tumble has this link: "Uncertainty over a May 19 special election in which California voters will be asked to approve six measures to balance the state budget has raised a crucial question: What if the measures are turned down? John Howard and Anthony York in Capitol Weekly -- 3/12/09."

News Articles On The Budget Deal

Here is the report from the Los Angeles Times. The deal includes proposed constitutional changes, which, among other things, would determine the duration of new taxes that are also part of the deal. Here is the article from the Sacramento Bee and here is the article from the San Francisco Chronicle.

Senator Leno Explains The Budget Crisis

State Senator Mark Leno, of Sonoma, San Francisco and Marin counties, explains some of the reasons for the state's budget crisis in this article from the San Francisco Chronicle. The article focuses almost exclusively on the expenditure side, without looking at the revenue side, which is natural enough in an article entitled "Who Increased State Spending in California"? The somewhat surprising answer? You did.

The Latest on the Budget Crisis

Today's San Francisco Chronicle details how the budget crisis is starting to hit (here), while Dan Walters of the Sacramento Bee offers his thoughts on a spending cap as part of a potential budget deal (here). And here is the Chronicle's latest report on the drive for a constitutional convention. According to the article, the Bay Area Council (the originator of the drive for a convention), along with the League of Women Voters, is co-sponsoring a daylong California Constitutional Convention Summit in Sacramento on Tuesday, Feb. 24. Speakers will address how a convention would be put together and what it would discuss. For more information, go to www.repaircalifornia.org.

New Poll On The Budget Crisis

Today's San Francisco Chronicle describes a poll conducted by the Public Policy Institute of California on potential solutions to the State's budget crisis. The news article is here while here is a link to the poll results themselves.

Court of Appeal Denies HJTA Petition

The Court of Appeal has denied the petition for writ of mandate filed by the Howard Jarvis Taxpayers Association and the Republican Members of the Legislature. As discussed in a previous post (here), the idea that the Legislature would adjudicate the constitutionality of vetoed legislation was, to put it politely, novel. Here's the Court's order: "BY THE COURT: Petitioners, Howard Jarvis Taxpayers Association et al., ask this court to issue a peremptory writ of mandate directing, among other things, "Respondents [Legislature of the State of California et al.] to set aside the Legislative action on AB 2 and SB 11 until such time as those measures receive a two-thirds vote of both houses of the Legislature, and [c]ommanding [the] Legislature to refrain from deeming as 'passed' . . . any other measures in the future that increase state taxes unless such measure has been approved by the requisite two-thirds vote in each house of the Legislature." We decline petitioners' invitation to intercede in the ongoing legislative process. Such judicial action is barred by the separation of powers doctrine enunciated in article III, section 3, of the California Constitution ["The powers of state government are legislative, executive, and judicial. Persons charged with the exercise of one power may not exercise either of the others except as permitted by this Constitution"].) Hence, "the courts may not order the Legislature or its members to enact or not to enact, or the Governor to sign or not to sign, specific legislation . . . ." (Serrano v. Priest (1976) 18 Cal.3d 728, 751 [footnotes omitted]; see also, Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 445.) Absent the Legislature's passage and the Governor's signing of such legislation, adjudications of its constitutionality and the other matters raised by the petition are not yet ripe for judicial review. The petition for writ of mandate is denied.

ps. Here is today's Sacramento Bee story on the decision.

Howard Jarvis Association Tilts At Windmills

Yesterday the Howard Jarvis Taxpayers Association, vowing never to be second in the race to the courthouse, filed a lawsuit challenging the constitutionality of the budget proposal passed by the Legislature last month. But the legislation was never enacted into law because the Governor (as promised) vetoed it. How does the HJTA (and the Insurance Commissioner, one of the other plaintiffs) think they have standing to challenge legislation before it's enacted? Do they really think that the Third Appellate District will give the Legislature an advisory opinion about whether never-enacted legislation is constitutional? Here is the relevant article from the San Francisco Chronicle; here is the latest from the Los Angeles Times; and here and here are articles from the Sacramento Bee. Finally, here is a link to the pleading filed by HJTA. (Thanks, Tim Bittle, for pointing me to its web site.)

A quick skim of the lawsuit indicates that its plaintiffs include Republican members of the Senate and the Assembly who claim that their voting rights are being diluted because of the majority's alleged violation of Proposition 13's two-thirds vote requirement. To my mind, at least, that makes this case look more like an internal affair of the Legislature, and hence non-justiciable in its present form (until legislation is actually enacted). We'll see if the courts agree. Here is a link to the Court of Appeal's docket for the case.

Are Redevelopment Bonds The Answer?

Are redevelopment bonds the answer to the State's budget crisis? Dan Walters reports here in the Sacramento Bee. And here is a link to our earlier post about the lawsuit filed by California redevelopment agencies against last summer's state budget raid.

Differing Views On Legislature's Tax Plan

The Sacramento Bee has canvassed law professors and received differing opinions as to the legality of adopting the Democratic plan for solving the budget crisis without a two-thirds vote. Interestingly, they didn't talk to any practitioners, other than Jon Coupal of the Howard Jarvis Taxpayers Association, who wants to be first in line at the courthouse. The article is here. Jesse Choper, in true law professor fashion, answered the reporter's question with his own (rhetorical) question ("What is a tax?"), and then said the answer, like most answers in the law, was complicated.

What's The Lesson of Pete Wilson's Tax Hikes?

This column by Los Angeles Times columnist George Skelton ponders the historical lessons of Pete Wilson's tax increases. Hint: it's not what the Legislature's Republicans think.

How Local Governments Raise Money in the Post-Prop. 13 Era

The Los Angeles Times has this interesting story about the use by local governments of creative sale and lease-back schemes by which they issue debt without securing voter approval. Meanwhile, here is the latest from Sacramento on the Governor's plan to solve the budget crisis. Not much detail.

Tom Campbell's Ideas For Solving The Budget Crisis

Former Congressman and State Finance Director Tom Campbell has penned this article on solving the State's budget crisis. His answer? Compromise. And here is the Sacramento Bee's latest report.

New Initiative Filed To Change Super-Majority Vote Requirements

Here is an article from the Los Angeles Times on the filing of a new initiative that would lower the super-majority requirement for passing a budget. "The California Budget Efficiency Act would retain a super-majority requirement for budgets and taxes but would lower it from the current two-thirds to 55%. As a tactical matter, that would be enough for Democrats to pass budgets as the Legislature currently is constituted." Here is a link to the measure itself.

More on the Budget Battle

Here is the latest from the Los Angeles Times on last week's budget battle, an article which claims that he Governor is sending conflicting signals regarding the legality of the Democratic plan. And here is an article from the San Francisco Chronicle's web site tonight, on the current stage of budget negotiations. Articles dated earlier today had claimed that progress was being made, but the outlook tonight is more uncertain.

ps. Here's an interesting editorial from the Los Angeles Times urging the repeal of the Constitution's super-majority requirements for budgets and taxes, and proposing some interesting alternatives.

Governor Will Veto Democratic Budget Proposal

According to the San Francisco Chronicle (here), Governor Schwarzenegger has said he will veto the Democratic tax proposal passed by the Legislature with a majority vote. Whatever the political or economical wisdom of the veto may be, it will spare the State litigation over whether the budget proposal required a two-thirds vote under the portion of Proposition 13 that requires a super-majority for certain tax increases. Here is the analogous story from the Los Angeles Times.

Proposition 13 and the Budget Crisis

Daniel Weintraub of the Sacramento Bee has an interesting article, available here, on the impact of property tax reassessments on local finance. If you bought at the height of the housing bubble and the value of your house is now less than what you paid, you can get your property reassessed for property tax purposes. Similarly, foreclosure on a house will usually result in a sale price that is below the last purchase price, thus triggering reassessment at a lower value. All this translates into less money for local governments. And since the state is already in a giant financial hole itself, it won't come to the aid of cash-strapped local governments. It's hard to be a government that doesn't have a printing press.